The growing availability of 4G LTE -- a faster data connection that will make in-car apps run more smoothly -- is shaking up the auto infotainment industry.
Major automakers are taking steps to make their infotainment systems compatible with the new standard, which runs up to seven times faster than 3G connections. This will make available a flood of new apps and services in autos.
Still up in the air, though, is how to charge consumers for the new services coming with 4G LTE. And the more enticing services will make driver distraction a more significant issue.
This spring, the redesigned Audi A3 compact sedan will come equipped with 4G LTE. Likewise, General Motors has announced plans to introduce 4G LTE connectivity in 2014.
The new, faster data service will allow passengers to download videos more easily, for instance, while apps such as Google Earth and streaming radio will run more quickly.
Buyers of the A3 will tend to be young and tech-savvy, said Anupam Malhotra, Audi of America's manager for the connected vehicle. "We already have a fairly young customer base," he said. "That forces us to be more aggressive" with infotainment technology.
Audi vehicles will have a Wi-Fi hot spot that will allow passengers to view videos. However, Audi won't allow videos to be shown on the cockpit's console screen, to limit driver distraction.
Even with faster connectivity, Audi isn't prepared to offer U.S. customers all of the infotainment features available to European motorists.
In Europe, one can dictate messages to a cloud-based app that translates them into text messages. "We are debating that type of service," Malhotra said.
Pricing has been one of the big riddles for infotainment: What services are consumers willing to pay for, and how much are they willing to pay?
Automakers are experimenting. One approach would be to treat vehicles as just another electronic device -- such as a tablet, smartphone or laptop -- that could be added to a consumer's monthly wireless bill.
Audi took this approach with its carrier, T-Mobile, which charges $15 per month and up for Audi Connect.
If consumers prove resistant to a monthly bill, it might be possible to sell infotainment a la carte.
Sprint, for example, is considering a pay-per-use policy that would allow consumers to download movies, books and other content for back seat entertainment, says Patricia Watkins, director of global client management for Sprint Velocity.
Watkins noted that Chrysler Uconnect, which uses Sprint as its data provider, has not announced plans to roll out 4G LTE. But if Chrysler does adopt it, car owners might be offered a menu of payment options.
"We would let them pay for it on a pay-for-use basis," Watkins said. "We believe we have to be flexible. We want to give consumers some options."